Evonik Stock Rises on FY2026 Guidance Despite Q4 Miss

Key Highlights

Evonik shares increased by 1% after the company provided fiscal year 2026 earnings guidance that met market expectations, offsetting a slight miss in its fourth-quarter results and a newly announced dividend reduction.

Performance Overview

The German specialty chemicals firm reported a fourth-quarter EBITDA of €357 million, falling just 2% short of the €363 million consensus estimate. This was primarily due to underperformance in its Custom Solutions division, although its Advanced Technologies segment exceeded forecasts.

Market and Dividend Impact

In response to challenging market conditions, Evonik has adjusted its dividend policy. The company anticipates a dividend of €1 per share for fiscal year 2025, below the expected €1.17. Looking ahead, a new payout ratio of 40-60% of net income will be adopted. Despite the cut, Evonik's implied dividend yield of 5.5% remains competitive compared to peers like BASF.

Summary and Outlook

Investor sentiment improved as the focus shifted to the forward-looking guidance for fiscal year 2026, which projects an EBITDA between €1.7 billion and €2.0 billion. This reassurance outweighed the Q4 earnings miss. However, potential earnings risks are noted for the first quarter, with performance likely weighted toward the latter half of the guidance period.

FAQ

Q: Why did Evonik's stock price increase despite missing Q4 earnings?
A: The stock rose because the company's fiscal year 2026 EBITDA guidance of €1.7-€2.0 billion was considered better-than-feared and aligned with consensus estimates, providing a positive outlook.

Q: What changes did Evonik make to its dividend policy?
A: Evonik reduced its expected dividend for fiscal year 2025 to €1 per share and will implement a future payout ratio of 40-60% of its net income.

Source: Investing.com